Critical Analysis: MSCI (NYSE:MSCI) vs. Research Solutions (NASDAQ:RSSS)

Research Solutions (NASDAQ:RSSS) and MSCI (NYSE:MSCI) are both industrial products companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Risk & Volatility

Research Solutions has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, MSCI has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Research Solutions and MSCI, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Research Solutions	0	0	2	0	3.00
MSCI	0	6	9	0	2.60

Research Solutions currently has a consensus target price of $5.50, suggesting a potential upside of 69.23%. MSCI has a consensus target price of $631.83, suggesting a potential upside of 7.17%. Given Research Solutions’ stronger consensus rating and higher probable upside, equities analysts clearly believe Research Solutions is more favorable than MSCI.

Profitability

This table compares Research Solutions and MSCI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Research Solutions	-4.57%	8.43%	2.71%
MSCI	43.06%	-162.06%	21.32%

Earnings & Valuation

This table compares Research Solutions and MSCI”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Research Solutions	$46.61 million	2.27	-$3.79 million	($0.08)	-40.63
MSCI	$2.80 billion	16.49	$1.15 billion	$15.23	38.71

MSCI has higher revenue and earnings than Research Solutions. Research Solutions is trading at a lower price-to-earnings ratio than MSCI, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

33.6% of Research Solutions shares are held by institutional investors. Comparatively, 90.0% of MSCI shares are held by institutional investors. 12.9% of Research Solutions shares are held by company insiders. Comparatively, 3.2% of MSCI shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

MSCI beats Research Solutions on 10 of the 14 factors compared between the two stocks.

About Research Solutions

Research Solutions, Inc., through its subsidiaries, provides research cloud-based software-as-a-service software platform and related services to corporate, academic, government and individual researchers in the United States, Europe, and internationally. It provides Discover platform that facilitates search discovery across virtually all scientific, technical, and medical (STM) articles available, including free basic search solutions and advanced search tools, which include the Resolute.ai and scite.ai products, a tools that allows for searching and identifying relevant research and find insights in other datasets adjacent to STM content, such as clinical trial, patent, life science and medtech regulatory information, competitor and technology landscape insights in addition to searching the customer’s internal datasets. The company also offers Article Galaxy, a solution that allows research organizations to load their entitlements, consisting of subscriptions, discount or token packages, and their existing library of articles. In addition, it provides Manage platform, a references solution that allows users to access the article inside the platform including setting up personal folders or team folders and allows researchers to markup and take notes on the articles in a supported browser on a desktop or tablet. Further, the company’s platform facilitates the sale of published STM content sold as individual articles. The company was formerly known as Derycz Scientific, Inc. and changed its name to Research Solutions, Inc. in March 2013. Research Solutions, Inc. was incorporated in 2006 and is based in Henderson, Nevada.

About MSCI

MSCI Inc., together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide. The Index segment provides indexes for use in various areas of the investment process, including indexed financial product, such as ETFs, mutual funds, annuities, futures, options, structured products, and over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct. The Analytics segment offers risk management, performance attribution and portfolio management content, application, an integrated view of risk and return service, and an analysis of market, credit, liquidity, counterparty, and climate risk across asset classes; managed services, including consolidation of client portfolio data, review and reconciliation of input data and results, and customized reporting; and HedgePlatform to measure, evaluate, and monitor the risk of hedge fund investments. The ESG and Climate segment provides products and services that help institutional investors understand how ESG impacts the long-term risk and return of their portfolio and individual security-level investments; and data, ratings, research, and tools to help investors navigate increasing regulation. The All Other Private Assets segment includes real estate and infrastructure data, benchmarks, return-analytics, climate assessments and market insights; business intelligence to real estate owners, managers, developers, and brokers; and offers investment decision support tools for private capital. The Private Capital Solutions segment offers tools to help private asset investors across mission-critical workflows, such as sourcing terms and conditions, evaluating operating performance, managing risk and other activities supporting private capital investing. MSCI Inc. was incorporated in 1998 and is headquartered in New York, New York.